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Income Tax Appellate Tribunal, B Bench, Mumbai
O R D E R
Per R.C. Sharma, AM
This appeal has been filed by the assessee against the order of the CIT(A)-26, Mumbai dated 23.12.2015 for A.Y. 2010-11 in the matter of order passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter “the Act”).
The assessee has taken the following grounds of appeal: - “1. The Learned C.I.T.(A) erred in confirming an amount of Rs.9,18,220/- even though confirmations were filed against Cessation of liability when the A.O. did not disturb neither Purchases nor the Sales.
2. The Learned CIT(A) erred in confirming an amount of Rs.6,30,076/- being the purchase price already paid by the assessee even though the liability was of previous years.
3. The Learned CIT(A) erred in confirming the A.O.'s disturbance of the assessment of earlier years and confirming the Balance in Sundry Creditors against the decision of the S.C. in the case of CIT v. Kesaria Tea Co. Ltd.
Shri Nitin M. Parakh HUF 4. The Learned CIT(A) erred in confirming the additions erroneously made out of Sundry Creditors by the A.O.”
Rival contentions have been heard and record perused. The brief facts of the case are that the assessee is engaged in trading of onion, garlic and potato. During the scrutiny assessment the AO made addition on account of cessation of liability. By the impugned order the CIT(A) deleted the entire addition except the following after calling for remand report for which the assessee is in further appeal before us: -
`3,21,360/- 1. Namdev Jadhav (Kolhe) `1,09,564/- 2. Shankar D. Rasal `2,28,960/- 3. Mahendra Bora `2,58,336/- 4. Manishkumar Ajmera --------------- ` 9,18,220 The CIT(A) has also confirmed addition of `6,30,076/- being purchases alleged to be already paid by the assessee.
We have heard the rival contentions and carefully gone through the orders of the authorities below and found from record that during A.Y. 2016-17 the assessee has paid the outstanding amount to Namdev Jahadav amounting to `3,21,360/- by way of account payee cheque. In respect of the amount due from Manishkumar Ajmera and Shankar D. Rasal, the amount has been written back in the Profit & Loss Account during A.Y. 2017-18 relevant to financial year 2016-17 and also paid tax thereon.
In view of the above we restore the matter back to the file of the AO to verify the factual position and if the AO found that amount due to Namdev Jhadav has already been paid by cheque, then no addition is warranted. Similarly the AO should verify if the assessee has, for the amount due from Manishkumar Ajmera, Mahendra Bora and Shankar D. Rasal written back in the Profit & Loss Account for A.Y. 2017-18 and also paid tax thereon, no addition should be made. We direct accordingly.
Shri Nitin M. Parakh HUF Similarly the amount due to Vipul Traders amount to `6,30,076/- 6. was also allegedly to be paid on 31.03.2012. The assessee has also filed confirmation and PAN card of Vipul Traders. Since the payment has been made, the addition should not be made again. In the interest of justice we restore this issue also to the file of the AO to verify the actual payment by verifying the cash book as well as from the party concerned.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 12th July, 2018.